Sharp to cut 11,000 jobs, sell off assets

Far-reaching restructuring plan also calls for cutting wages

OSAKA – Struggling Sharp Corp. plans to slash a total of 10,966 employees in Japan and overseas while selling off assets to generate ¥213.1 billion by the end of next March, according to the company’s restructuring plan obtained Tuesday.

The plan, submitted Monday to financial institutions by the Osaka-based consumer electronics maker, shows it will cut wages and unload its overseas plants, a subsidiary and shareholdings in Toshiba Corp., while integrating four domestic sales companies around next April.

To implement the plan, Sharp will set up an emergency management committee Oct. 1 headed by President Takashi Okuda. The company aims to return to profitability in the business year starting next April with a group net profit of ¥14.6 billion, according to the plan.

The company plans to overhaul its liquid crystal display TV business, strengthen its small and medium-size LCD panel business for smartphones, and substantially cut down its solar battery operations.

Sharp logged its biggest group net loss of ¥376 billion in fiscal 2011 following a slump in its LCD TV and panel sales.

In response to the latest restructuring plan, Sharp’s main creditors Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ, as well as other lenders, are expected to provide a total of around ¥360 billion in loans.

By the end of March 2014, Sharp will cut 19 percent of its current consolidated workforce of 57,170, including reducing 3,100 domestically through voluntary and age-limit retirement. Other employees subject to the cuts include those working at TV assembly plants in Mexico, China and Malaysia that the company plans to sell.

In addition to the personnel cuts, the company will halve bonuses from next month to September next year, and decrease wages to save almost ¥50 billion in personnel costs in fiscal 2012 compared with the previous year.

On the sales of its assets, Sharp plans to generate around ¥38 billion by shedding overseas plants and obtain ¥25 billion by selling U.S. solar power generation firm Recurrent Energy LLC.

The plan includes unloading its shareholdings in Toshiba for ¥1.6 billion and selling its building in Shinjuku Ward, Tokyo, for ¥3 billion.

The company will consolidate its home appliance, system, office equipment and solar battery sales companies into one company, tentatively called Sharp Marketing Japan, and reorganize them into three groups — for consumers, for companies and for solar batteries.

Meanwhile, the plan does not show specifics about Sharp’s ongoing negotiations with its Taiwanese business partner Hon Hai Precision Industry Co. to revise the terms of their capital tieup agreement.